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What is the difference between a Corporation and a Limited Liability Company?
What is a member?
How many members must a Limited Liability Company have?
What is a Resident Agent or an "Agent for Service of Process" and who can be such an agent?
What is "Service of Process"?
Must I have an office in the state of incorporation or organization?
Can the Resident Agent forward my commercial or personal mail to me?
What records will CIS keep, and what documents will be sent to me?
How does a foreign company file the documents for doing business in California?
How can I change details about my Corporation or LLC on the official records?
What is an Apostille, and why might I need one?
What is the difference between a Corporation and a Limited Liability Company?
A Corporation is a business entity designed to limit the liability of the owners, transact business as if it were an individual and give a structure that allows it to be operated in an agreed upon fashion. The courts of the state of incorporation will treat it according to the rules set down in that state's Corporation statutes (laws). Corporations typically have several owners (investors) and sometimes the owner's shares (stocks) are traded on public exchanges.
Subchapter "S" Corporations are filed the same as a regular corporation, but then an election is made via IRS form 2553 before the 16th day of the third month of the tax year for treatment as a small corporation. This can eliminate double taxation of corporate dividends, but will limit the number of shareholders to 75.
Limited Liability Companies (LLCs) are the same kind of entity, but they are treated by the courts and the tax authorities according to a different set of statutes. One of the many differences is the tax treatment of the profits from a LLC versus a Corporation. Although there is pending legislation to eliminate this difference, at this time, a LLC does not pay any federal income taxes. All the profits are passed through to the owners (members) according to their relative interest in the company. A Corporation, on the other hand, does pay federal income taxes, then distributes the after tax income to the shareholders, who then pay taxes on their own share (double taxation).
Another important difference which you should discuss with your tax accountant or attorney is that Corporations pay federal income taxes on their worldwide income, while LLC's income only in the U.S. would be distributed to the members to be taxed. This is also the answer to the next question:
What is a member?
A member of a Limited Liability Company is an owner. This is similar to a shareholder in a Corporation. Generally, there are fewer members in a LLC than there are shareholders in a Corporation. In most states, you can organize a LLC with only one member. The tax authorities are grappling with this issue, and trying to make that more restrictive so they can collect more taxes, so we recommend at least two members in LLCs. There are services in various jurisdictions that provide nominee members who can protect the privacy of the members.
How many members must a Limited Liability Company have?
Tax authorities are working to restrict the flexibility of Limited Liability Companies (LLCs) by requiring at least two members, so they can collect more taxes.
What is a Resident Agent or an "Agent for Service of Process" and who can be such an agent?
A Resident Agent, a Registered Agent and an Agent for Service of Process are the same thing: an individual (or another business entity) designated by a corporation or LLC to accept service of process from the courts if the company is sued. State residency is the only requirement for an individual to be named as an agent for service of process. A Registered Agent should be available during normal business hours to recieve court documents and be ready to forward them to the Corporation or LLC immediately and positively. Better services, like CIS, will use a courier with signature tracking and notify a designated person or persons in the company via phone and/or email. This should not be confused with a mail forwarding service. Commercial mail should not be directed to this address. Arrangements can be made for mail, phone, fax and email forwarding on request.
NOTE: In some states a company cannot act as its own agent. Approval from a proposed agent should be obtained prior to designation.
What is "Service of Process"?
Service of Process is a document from the court that notifies you that your company is being sued by someone. It will tell you when and where the courts will hear the case, and what you have to do as far as the court is concerned. Process can be served in civil and criminal cases, but in criminal cases, it usually goes along with being arrested. We hope that you will not have this experience.
Must I have an office in the state of incorporation or organization?
Generally, no. In some states, you must name a principal place of business within the state, but this can be the Resident Agent's location. CIS will inform you of any such requirements and solutions prior to executing any orders.
Can the Resident Agent forward my commercial or personal mail to me?
Mail forwarding is a separate service which some Resident Agents will do, and others will not. We can arrange mail forwarding, among other services which will allow you to give the appearance of a presence (for marketing or other reasons) in the state.
What records will CIS keep, and what documents will be sent to me?
CIS will keep copies of all documents that are used in preparation of the order and resulting certificates, invoices, etc. Original certificates, filed and certified Articles of Incorporation or Organization, filed Amendments, etc. will be forwarded to you. If a filing receipt is needed (required by some banks), then it will be included. Please check with your bank and advise us in the "special instructions" section of the order.
How does a foreign company file the documents for doing business in the state?
A foreign (out of state or country) corporation transacting intrastate business in the State must qualify to do so with the Secretary of State's Office. In some states, this is called an "Application for Authority." "Transacting intrastate business" is defined as entering into repeated and successive transactions of a corporation's business in this state, other than interstate or foreign commerce. If you are unable to make a determination you will need to consult private legal counsel. The Secretary of State's Office cannot provide legal advice concerning a corporation's need to qualify to transact intrastate business in the state.
CIS will file any necessary documentation to gain qualification or authority to transact business in any state.
How can I change details about my Corporation or LLC on the official records?
Certain information about members, managers, the name of the entity, etc. can be changed by an amendment. Amendments are added to the records of the entity, but do not change the original information. That information stays in the history of the company filings. In only a few states can you get a "restated Articles of Organization", and it will state the fact that they are restated at the top. The amendments are filed as the latest document in the history of filings. If you want to know the latest information about a company, you need to request copies of "all filings" pertaining to that company, then look at them in date order; to be sure you have the most recent. The original filing date cannot be changed.
What is an Apostille, and why might I need one?
An Apostille (a French word meaning notation) is a standard international notarization or certification provided under The Hague Conference on Private International Law: This was a 1961 Convention abolishing the requirement of legalization for foreign public documents for the purpose of authenticating documents for use in foreign countries. The treaty was ratified by the United States on September 1, 1981. Authorities in the United States of America who are authorized to issue an Apostille as referred to in the Hague Treaty are the various Secretaries of State.
The Apostille is formatted in numbered fields which allow data to be understood by the receiving country regardless of the official language of the issuing country. It is registered by the issuing authority for the country it is intended for. It may or may not state the intended country on the face, but it will not be verified if another country calls the issuing authority about it. The Apostille is attached to the document it certifies by some tamper evident means. The receiving party should inspect the attachment to ensure it has not been moved to another document. Just about any legal document can be authenticated with an Apostille, by having it notarized locally, then sent to the Secretary of State for the Apostille. It’s most common use in setting up business structures internationally, is for submission to a bank outside the U.S. of the incorporation papers (Articles of Organization or Incorporation).
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